What is a fair price for a video?

Prices for videos can vary widely. We’ve all heard about the 30 second commercials that cost $2 million to produce. We also know we can whip out our smartphone and make a quick video for free. Corporations spend $25,000 to make a 2 minute video advertising their product. We can pay our teenage nephew $50 to make a video slideshow for grandpa’s 75th birthday. Wedding videos can range from $500 to $2,500 to $7,500 and up. The range is wide open. So how do we determine how much is reasonable to pay for a well-made video?

Professional video is often estimated on a PFM (per finished minute) basis. It is not uncommon for each finished minute of video to reflect at least 10 hours of work. Often considerably more. This takes into account the consulting, planning, shooting, editing, refining, and publishing steps of getting a well-made video in place on a website. Ratios as high as 15 to 50 hours of work PFM are not uncommon.

For shops with production and editing teams, these hours multiply by how many hands touch the project simultaneously. For instance, a typical 4 hour shoot could call for a director, an assistant, a camera operator(s), and a lighting tech. Those four hours count as 16 hours on the video. And their pay rates are all different. A freelance camera operator alone can require $500/day.

In deciding on how much to pay for video, we really need to consider the value that a video brings. Promotional videos, for instance, are designed to attract new customers by highlighting the strong points of your company or institution. One consultant might want to emphasize the personal attention she gives her clients. Another might want to emphasize his no-nonsense, cut-to-the-chase approach. One school might highlight its emphasis on athletics while another tries to leverage its 21st Century skill development. This point of emphasis is called the USP or Unique Selling Proposition. It is the strong point(s) that a business or school offers potential clients.

The hope is that the school will keep competitive students and hopefully gain new students by connecting with families looking for their USP. If you know my story, I’m a former teacher turned entrepreneur. Many of my promotional videos as a teacher were aimed at promoting innovative educational programs. Administrators were hoping to attract grant money and students to their schools. In California these days each student can mean a gain (or loss) of around $6,000 for the year. How much is reasonable to spend to bring a dozen new families into the district?

Consultant X could charge $5,000 for a two day onsite training. A good video could help X move from doing 3 trainings per month to doing 5 per month. How much should X invest to bring in that additional $120,000 in revenue?

Let’s talk about ROI: return on investment. School Y invests $7,500 to set up a webcasting studio. This helps them build capacity for a growing video presence on their website. The fresh, relevant, local content causes their search ranking to climb over time. When prospective parents search for information about the school, they find out about all the great learning happening at School Y. The studio could almost pay for itself if it helps School Y gain even one student. What would the ROI be if it helps convince one new family to enroll their 2-3 children?

Timelines are also important in the discussion of ROI. Do we want to make our money back in one month? 6 months? a year? What kind of profit do we hope to get from a particular marketing or training investment? These questions can be hard to answer. They make us deal with metrics (how we measure success). That is the subject for another post. Suffice it to say, tracking where sales come from is key to identifying which marketing dollars are making a difference for you.

In your scenario, what would be your ROI timeline for a video or webcast studio? Do you have a story of a successful (or unsuccessful) video investment? Please make a comment. Also, do you know anyone who could benefit from this post? Please share as it will help them and help me produce more content like this.